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Intel sues NVIDIA over chipset license agreement

NVIDIA and Intel land in court over a licensing dispute about chipsets for …

Intel has announced that it has filed suit against NVIDIA over whether or not the GPU and chipset designer has the rights to build solutions for Nehalem-based CPUs. According to Intel, the current agreement between the two companies only covers processors that do not contain an integrated memory controller .

The argument between the two companies centers on whether or not NVIDIA has the right to produce chipsets for Nehalem-class microprocessors. Intel has requested summary judgement in a filing with the Court of Chancery in the state of Delaware and issued a statement saying, "Intel has filed suit against Nvidia seeking a declaratory judgment over rights associated with two agreements between the companies. The suit seeks to have the court declare that Nvidia is not licensed to produce chipsets that are compatible with any Intel processor that has integrated memory controller functionality, such as Intel’s Nehalem microprocessors and that Nvidia has breached the agreement with Intel by falsely claiming that it is licensed. Intel has been in discussions with Nvidia for more than a year attempting to resolve the matter but unfortunately, we were unsuccessful. As a result Intel is asking the court to resolve this dispute." [Emphasis added.]

I emphasized the bit about integrated memory controller technology because it seems an odd point for Intel to stand on. When Intel took VIA to court over similar licensing issues ten years ago, the company claimed that the Pentium 4 bus was a proprietary, Intel-developed technology that VIA had infringed upon and refused to license appropriately.

The modern equivalent, as far as I can tell, would be for Intel to claim NVIDIA has no license to produce motherboards utilizing Intel's QuickPath Interconnect (QPI). It may be that Intel is essentially alleging this and simply chose to word the claim differently, but if NVIDIA isn't infringing upon QPI, what's the actual point of infringement—the CPU socket? Based on what we know thus far, it's not clear.

NVIDIA spokesperson Ujesh Desai told Bit-Tech that NVIDIA will defend itself, and it has been working with Intel for over a year to reach an amicable solution to the licensing issue. However, at the core of the issue, NVIDIA feels that its license agreement does allow it to build chipsets for Nehalem and future Intel processors that feature an integrated memory controller.

Desai goes on to say that NVIDIA will not change its future roadmap and will continue to work on the development of chipsets for the Intel processors in question. This potential litigation will not affect any of the company's shipping products and should not delay Ion's trip to market later this year.

NVIDIA can bang its drum all it likes, but the company is making a tremendous mistake if it ignores what happened to the last company to cross Intel on the subject of chipset licensing.

NVIDIA has issued an official statement on the Intel suit saying in part, "NVIDIA responded to a court filing in which Intel alleged that the four-year-old chipset license agreement the companies signed does not extend to Intel’s future generation CPUs with 'integrated' memory controllers, such as Nehalem. The filing does not impact NVIDIA chipsets that are currently being shipped. Intel is trying to delay the inevitable value shift from the CPU to the GPU. NVIDIA believes that our bus license with Intel clearly enables us to build chipsets for Intel CPUs with integrated memory controllers. We are aggressively developing new products for Intel’s current front side bus (MCP79 and MCP89) and for Intel’s future bus, DMI."

The world's largest GPU maker states that the suit is a clear attempt by Intel to slow the adoption of NVIDIA platforms to protect a decaying CPU business as evidenced by the rapid shift of the market to Intel's lowest priced processor, the Intel Atom.

NVIDIA can bang its drum all it likes, but the company is making a tremendous mistake if it ignores what happened to the last company to cross Intel on the subject of chipset licensing. As I previously mentioned, erstwhile chipset designer VIA Technologies once took such a tack and lost, badly.

In 2000 and 2001, VIA claimed it did not need a bus license to build P4-compatible motherboards. At the time, the Taiwanese company was a very real force in the chipset industry; the Apollo Pro 133 (and its related brethren) had stolen a wide swath of the Pentium 3 market beginning in 1999, the KX133 and KT133 chipsets had both been very successful platforms for the original K7 and its Thunderbird refresh, and the Apollo MVP3/MVP4 series had become the dominant solutions for the still-sizable Socket 7/Super Socket 7 market.

When Intel announced that all third-party chipset vendors would need to license the Pentium 4's bus technology, VIA arrogantly refused, and the rest is history (along with the company's entire motherboard business). Whatever motherboard OEM support VIA thought it had based on dark alley deals and off-the-record conversations evaporated in the harsh light of day once Intel ramped up its legal pressure; cutting-edge VIA P4 DDR motherboards vanished off store shelves faster than a $49 Wii special at your local Wal-Mart.

If Intel and NVIDIA can't reach an amicable solution, the smaller chipset vendor could find itself unable to provide a full range of solutions for Apple products. To date, all of the new Apple portables unveiled since the initial design win announcement back in October have been powered by NVIDIA chipsets and GPUs. That's a feather NVIDIA won't want to lose, particularly given the company's weak financial performance and dour outlook for calendar year 2009.

I emphasized the bit about integrated memory controller technology because it seems an odd point for Intel to stand on. When Intel took VIA to court over similar licensing issues ten years ago, the company claimed that the Pentium 4 bus was a proprietary, Intel-developed technology that VIA had infringed upon and refused to license appropriately.

The modern equivalent, as far as I can tell, would be for Intel to claim NVIDIA has no license to produce motherboards utilizing Intel's QuickPath Interconnect (QPI). It may be that Intel is essentially alleging this and simply chose to word the claim differently, but if NVIDIA isn't infringing upon QPI, what's the actual point of infringement—the CPU socket? Based on what we know thus far, it's not clear.

Those claims are not equivalent. The Core i5 (I guess we can call them that officially now?) will have an integrated memory controller, but not use QPI. They will integrate the entire northbridge and communicate with the southbridge using Intel's current northbridge-southbridge bus, DMI.

I think the last paragraph hits the nail on the head. This is about Intel shoring up is platform solution during a time when OEMs are realizing that the GPU is now important even in the value market. Their current integrated GPUs simply don't compete with nVidia's or the AMD chipsets available on their platform. I see this as little more than Intel strong-arming nVidia until they're able to produce a competitive, larabee-based, integrated GPU and have a "complete" platform again.

There are a couple huge differences between nvidia stuff and via stuff though. Via stuff was always a little flaky, even at the end. Having a via logo on your computer was a step up from having a cyrix logo but still wasn't usually a good sign since. Nvidia has a reasonably good track record and generally considered a good name brand, via had a terrible track record that started to be ok but not great towards the end and a name brand recognition that was generally poorly received. Plus like the article mentions, intel graphics solutions are basically useless.

There is something going on here that I don't understand. Intel is planning to move to an integrated GPU as well (Larabee?) using an MCM like the pentium pro (<3). If they do that, Nvidia is basically given the shaft anyway since their GPUs are frozen out of intels CPUs.Now maybe intel is worried about the scenario where AMD comes back and allows nvidia access to their chips.

NVIDIA can bang its drum all it likes, but the company is making a tremendous mistake if it ignores what happened to the last company to cross Intel on the subject of chipset licensing. As I previously mentioned, erstwhile chipset designer VIA Technologies once took such a tack and lost, badly.

I wanted to expand on the above posters remarks involving the difference between Nvidia and VIA.

Nvidia has a huge amount of patents and licenses that VIA only dreamed of. This could be a very slippery slope for Intel. Nvidia has the capability of making Intel's life a lot more difficult than VIA ever could. Nvidia has a lot more resources at their disposal.

Based on the nVidia quote in the argument, the disagreement isn't over QPI but over DMI. Mainstream and low-cost Nehalems will integrate the northbridge on package and only need a separate southbridge over DMI. What nVidia is arguing is that it wants to be able to make those southbridges. Realistically, I'm not even sure why nVidia is bothering to fight for this. There just isn't much product differentiation possible on a southbridge and I doubt that there is much margin to be made on just selling southbridges to attach via DMI. What's the point?

nVidia has basically already been locked out of the IGP market for Nehalem. Mainstream and low-cost Nehalems will already have an IGP and even Core i5 Lynnfield and Clarksfield which don't have an IGP only have DMI. DMI is meant as a northbridge to southbridge interface and probably isn't very suitable to hang an IGP off of. Only high-end Nehalems have QPI, but they are least likely to need an IGP. Realistically, nVidia should just focus on making the best budget discrete GPU since that's a better value proposition than trying to sell an alternative IGP when most Nehalems will already have one.

In terms of Apple, I always thought nVidia as a chipset supplier was a dead end precisely for this reason. Mainstream Nehalems with integrated northbridges and DMI will eliminate the need for nVidia IGP chipsets. It isn't clear if nVidia has a QPI license, and even if they did, Intel hasn't let them into the Xeon market used in the Mac Pro and I doubt Intel is going to be so generous. With the purchase of P.A. Semi, Apple has enough experience to get a DMI license from Intel and make their own custom southbridges, which actually makes more sense since they can integrate additional functionality like touchpad and firewire controllers which are currently separate chips into the sourthbridge. Even nVidia GPU commitment on the Mac is questionable, seeing that nVidia's drivers lag behind ATI's such that the HD3870 actually outperforms the 8800GT in Core Image GPU acceleration used in Apple's own applications. nVidia is also continuing to push their own C for CUDA alongside OpenCL while ATI has stated that they are supporting standards like OpenCL and DX11 Compute Shaders over their own proprietary GPGPU framework. So all in all, I'm not sure where Apple's support of nVidia is intended to go.

I think Intel is heading into murky water here. On one hand we all know that the GPU is becoming more and more important. Hence the work Intel is doing integrating them. But on the other hand, if Intel does do this then they look like a monopoly controlling a major portion of the market. How does Intel go forward in the direction things seem to be moving without knocking Nvidia down a few pegs. Also, what does Nvidia do? They dont have the technology to build their own CPU's. Do they try to team up with AMD? AMD already has ATI. Seems like Nvidia is the odd man out because Intel brought their own date to the dance.

Nvidia is the odd man out...but it's not in trouble - too many resources, too many patents etc. It will inevitably develop its' own x86 chip...it's just a matter of time.

The structure of mainstream computing hardware is shifting toward multi-core processing and the GPU is fusing with and in may cases overriding the CPU in terms of importance in the overall performance and capability of a system. NV should be able to compete in this new environment...especially with experience the HPC space already.

Maybe Intels just trying to get rid of Nvidia before larrabee comes out.Then if you want an intel cpu you have to get an Intel gpu unless you buy a high end system.

Hopefully Intels executes properly this time with the graphics. Their past record on graphics is pretty piss poor and even worse with graphics drivers. Their record makes via/S3 look good on drivers and quality.

How many companies have been unable to compete/dropped out of the graphics market over the last 10 - 15 years ?

I think Intel believes Nvidia (and ATI) place is in add in boards. Of course playing nice with Intel doesn't work either... look what they did to poster-child ATI.. they wiped out ATI's whole market of low-end GPUs with integrated video. ATI represented like 40% of all video chips sold at one point until Intel ate their lunch. Now Intel is trying to cut Nvidia out as well. They're changing their new processors "just enough" to hide behind a new kind of patent.

Perhaps it's time for Nvidia to stop making add-in cards. Perhaps it's time for AMD/ATI to only make integrated video cards to their CPUs. Nvida has a license for the AMD Hyper-transport bus connecting CPUs directly, it would be trivial to make a GPU for this if they get cut out of Intel. Perhaps we could have a graphics chip that was interchangeable with AMD CPU sockets. Then we could have CPUs or GPUs depending on what we needed! Intel has a cross-license to the technology, they just choose not to use it, so it's not "monopolistic".

I think Intel believes Nvidia (and ATI) place is in add in boards. Of course playing nice with Intel doesn't work either... look what they did to poster-child ATI.. they wiped out ATI's whole market of low-end GPUs with integrated video. ATI represented like 40% of all video chips sold at one point until Intel ate their lunch. Now Intel is trying to cut Nvidia out as well. They're changing their new processors "just enough" to hide behind a new kind of patent.

Perhaps it's time for Nvidia to stop making add-in cards. Perhaps it's time for AMD/ATI to only make integrated video cards to their CPUs. Nvida has a license for the AMD Hyper-transport bus connecting CPUs directly, it would be trivial to make a GPU for this if they get cut out of Intel. Perhaps we could have a graphics chip that was interchangeable with AMD CPU sockets. Then we could have CPUs or GPUs depending on what we needed! Intel has a cross-license to the technology, they just choose not to use it, so it's not "monopolistic".

I wanted to expand on the above posters remarks involving the difference between Nvidia and VIA.

Nvidia has a huge amount of patents and licenses that VIA only dreamed of. This could be a very slippery slope for Intel. Nvidia has the capability of making Intel's life a lot more difficult than VIA ever could. Nvidia has a lot more resources at their disposal.

won't be as mucv as intel has.

no matter what , i think intel is right this time. Nvidia do need to obtain license. by the way what so difficult to get one?

I wanted to expand on the above posters remarks involving the difference between Nvidia and VIA.

Nvidia has a huge amount of patents and licenses that VIA only dreamed of. This could be a very slippery slope for Intel. Nvidia has the capability of making Intel's life a lot more difficult than VIA ever could. Nvidia has a lot more resources at their disposal.

won't be as much as intel has.

no matter what , i think intel is right this time. Nvidia do need to obtain license. by the way what so difficult to get one?

VIA were licensed for GTL+ and all future variants of it from their acquisition of S3. Intel had no problem with that in the P3 days, but they DID have a problem with VIA using DDR (P4X266 chipset) when Intel stood to make a fortune from stock options in Rambus if more RDRAM was sold.

Hat Monster has the history right. VIA gave the market an option Intel and Rambus didn't want, but the rest of the world did.

Via didn't think it needed a new license since they inherited it. When given an option for a license, you can guess how much they wanted, enough to make their chipset not profitable, in other words, "no."

Via's last chipset worth getting was the KT266A. After that, nVidia and their expertise with graphics took over. Wonder what SiS is up to these days?

Heh, who can forget what happened to ATi's Intel chipset business the moment they were acquired?

nVidia, there is always Via's Nano to work with, and it outperforms the Atom. So what if it takes a few more watts.

I think Intel realizes that they have a singular advantage in this monumentally awful economy. That being, no matter how bad the economy gets, Intel is probably alone among their major competitors in definitely being able make it out the other side of the recession. This is very much -not- a given for Nvidia, ATI, and some of Intel's other competitors.

Realizing there's not much chance of high revenues over the next year or two, I believe Intel is looking down the road to when the economy recovers and trying to maximize profits for that future period of time. Their abandonment of current processes and move to 32nm tends to support this. One way to maximize profits is to have fewer competitors. I have to wonder if that is exactly Intel's motivation in filing this lawsuit.

The easiest way to get rid of a competitor is to kick them when they're down, and Nvidia is certainly down. Intel's suit could be nothing less than a ploy to keep certain Nvidia products - perhaps Ion - off the market for a limited period of time. If Intel succeeds in keeping the Ion platform under injunction for eight or ten months, it could do serious financial harm to a company that is already looking at some dire straits.

With the credit markets frozen and jobless rates not expected to peak for another 6 to 10 months, luxury purchases like graphic cards upgrade probably won't be at the top of consumer's agendas. Worse, it's not looking like a banner year for the sort of high-end PC games that drive purchases of new video cards. Another problem for Nvidia is that WOW actually runs reasonably well on some of Intel's newer mobile chipsets, no longer absolutely requiring a non-Intel chip. I expect this combination of market forces could significantly diminish Nvidia's revenue over the next year, and that's before this Intel business.

This is what makes me wonder if Intel isn't trying to pile on while the pilings' good. Even if this legal fight only manages to tie up Nvidia's product releases for a few months, it may be enough to be a "last straw". I'm no market maven and I definitely don't closely follow either of these companies, but everyone knows Intel -always- plays for keeps and has a special antipathy for Nvidia. At the end of this recession, don't be surprised if Nvidia is no longer their own company, or worse...

"Intel is trying to delay the inevitable value shift from the CPU to the GPU. NVIDIA believes that our bus license with Intel clearly enables us to build chipsets for Intel CPUs with integrated memory controllers."

For years JHH was resolute in refusing to purchase Intel bus licenses. I recall reading years ago a quote of his expressing his outrage that Intel had the cheek to ask $5 a pop--which explained why nVidia was pedal-to-the-metal in supporting AMD early and for so long, as presumably nVidia didn't have to fork over $5 a pop to AMD.

This just tells me that JHH is still very lukewarm in his desire to support Intel--the seeming lack of interest in getting SLI to Intel for so long would seem to buttress this point of view. Frankly, I've never understood nVidia's proprietary approach to SLI licensing because, obviously, nVidia stands to make a lot more money from selling second gpus than it would from selling an SLI license to Intel and other OEMs. At the moment nVidia seems fairly confused about some things.

As to the remark above about Intel worrying over the "value shift" from cpus to gpus, it seems odd that nVidia evidently doesn't understand that Atom is a "value cpu" which is right now driving the "value" (very slim profits) market.

Actualy, I find weird that Intel can enforce a license down nVidia's throat. Ok they've patented QPI, but I tougth that patent prevent people from reusing the concept, but couldn't prevent interropperability. nVidia would be infringing patent if they would produce a chip that use QPI (like a CPU, or a droppin GPU), but it's not if it build a northbridge compatible with the CPU. The matters is to define where is and what is QPI. In fact, QPI is not the copper lane that links the northbridge with the CPU, its only the communication protocol that links both. Intel can't enforce a restrictive ban on northbridge how speak QPI because it would be uncompetitive business practice and nVidia could sue them back for this. I think the issue now is more a breach of contract.

Now, does this mean the end of nVidia? Unless there's sunddenly another alternative GPU builder that spun up and take its splace, I don't take it will die anysoon. What could happen though, is that it may produce its own CPU. Producing a x86 compatible CPU would be a PITA because Intel will surely charge them two arms and a leg for the licenses. But, nVidia could still buy the license from someone else or buy someone else. I think nVidia will end up buying Via. The x86 CPU market is now to low power CPU and mobile plateform. The Nano has proven itself against the Atom. Via also has a long history, has been in business for age and would prove to be a valuable acquisition. The only thing is not to reproduce what happened to AMD when they bought ATI. Integration is a hell of a task, especially when you merge two giants. Sure now it would be the otherway around, a GPU/Chipset maker buying a CPU/Chipset maker, it could prove to be more easy. In the end, we could end up with exclusive plateform again. You would have AMD own combination of CPU, chipset and GPU, the same for nVidia and Intel. Don't know if it would be anygood for the consumer though.

Even if nVidia loses, it's not going to take long for gamers to figure out that Intel's IGP sucks, as usual, and end up buying a real GPU anyway. In this economy, it's probably not going to be a high end GPU, but it probably will be one of nVidia's. Not that ATI cards suck, but nVidia still has brand appeal.

Intel may be killing the goose here. No nVidia chipsets for Nehalem means no SLI on Nehalem. Considering the only other option out there right now is Crossfire, which Intel licenses from AMD, they'd be on precarious ground. AMD could very easily withdraw their license for Crossfire, and then Phenom would be the only platform with dual/tri-videocards. And many, many enthusiasts (the people who buy high-end consumer chips like the i7) would be willing to go with a less powerful AMD CPU if it means they can get more graphics power.

People talking about SLI can crossfire being important is totally missing the point. Intel don't make the majority of it's money from people who buys 2 video cards or more. Those people are first of all minority. Secondly did anyone remember a while back laptop shipments for the first time exceeded desktops?

The vast majority of people, the bread and butter, aren't gamers (gasp!).

So does Intel cares too much about SLI? Most likely slightly but then again maybe to their business minds it seems like something not worth the money or effort.

Not exactly, there was a lawsuit by Intel over the Apollo Pro 133 chipset, for pretty much the same reasons as the later P4X266 Intel lawsuit.Luckily it had much less effect and was settled soon after Intel introduced it's SDRAM-supporting 815 chipset. In contrast, the later P4X266 Intel lawsuit dragged on until around the time Intel introduced the 800 Mhz FSB with it's 865 chipset.

From what I can gather is that Intel isn't quite ready for the market change and is doing all it can to keep others from getting ahead of them. If Intel wins this little spat, nVidia has the ability to drop Intel altogether and go it alone, for a while anyway.

Intel will have enough strength to be a solution for "everything" but as the long term turns into the short term, will Intel have spread itself too thin?

Meanwhile, AMD has to be rolling in the floor dying of laughter as its two biggest competitors in both markets go at each other like little children.

Originally posted by Bicarb:There are a couple huge differences between nvidia stuff and via stuff though. Via stuff was always a little flaky, even at the end. Having a via logo on your computer was a step up from having a cyrix logo but still wasn't usually a good sign since. Nvidia has a reasonably good track record and generally considered a good name brand, via had a terrible track record that started to be ok but not great towards the end and a name brand recognition that was generally poorly received. Plus like the article mentions, intel graphics solutions are basically useless.

I wouldn't say those differences are huge.

I was working in the service department of a computer company back then, and we had *massive* issues with VIA stuff. Weird incompatibilities you would never think of.

But quality issues don't really come into play. Yeah, VIA was crap, but it was Good Enough. "Why should I pay more when *this* board has the same specs?" After replacing a motherboard or two, the customer wouldn't need to come back, and they didn't "pay extra for nothing".

Both VIA and nVidia fit in the following:

_____, a decent sized company (though smaller than Intel), that has decent clout in the industry, that sells lots of chips, that's going to/has had its arse handed to it by Intel.

Originally posted by ravyne:I think the last paragraph hits the nail on the head. This is about Intel shoring up is platform solution during a time when OEMs are realizing that the GPU is now important even in the value market. Their current integrated GPUs simply don't compete with nVidia's or the AMD chipsets available on their platform. I see this as little more than Intel strong-arming nVidia until they're able to produce a competitive, larabee-based, integrated GPU and have a "complete" platform again.

++Doubleplus good. Totally agree.

Is this "anti-competitive" behaviour? Intel appear to be using licencing to protect there own market, excluding others. How is this different from Lexmark using the DMCA to protect their ink cartridge market?

Originally posted by kray28:Nvidia is the odd man out...but it's not in trouble - too many resources, too many patents etc. It will inevitably develop its' own x86 chip...it's just a matter of time.

Really? Do you really think so? It didn't work for Cyrix, Transmeta, and even IBM gave up the space. AMD is barely able to compete, and now that Intel has teh Xeon covering the servers, Core for the mainstream, and Atom on the low end, where do you see nVidia fitting in?

I mean this as a serious question. I'd love Intel to have a decent sparring partner (we haven't had that since the Athlon), but I just can't see it coming from nVidia.

Originally posted by gotak:People talking about SLI can crossfire being important is totally missing the point. Intel don't make the majority of it's money from people who buys 2 video cards or more. Those people are first of all minority. Secondly did anyone remember a while back laptop shipments for the first time exceeded desktops?

The vast majority of people, the bread and butter, aren't gamers (gasp!).

So does Intel cares too much about SLI? Most likely slightly but then again maybe to their business minds it seems like something not worth the money or effort.

So, how many of those "bread and butter" people are buying Core i7, rather than Core 2? Since my argument was in relation to Core i7 and the enthusiast market and all...

Besides which, most people might not be in the enthusiast market, but the enthusiast market is significantly higher margin than the mainstream market. You think Intel will ever get away with charging Joe Average, or an OEM that caters to him, $900 for a processor? Not likely. Intel would be foolish to just hand a significant portion of that market over to AMD, especially when they've been successfully freezing AMD out of it since the launch of Core 2, and could do the same with Core i7 if they play their cards right.